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Glad I already got my Chinese EV then. Actually, they're expanding the US factories here. While it will cost more to build a Chinese EV in the US than in China they were already planning on it anyway. As far as the Chinese EVs flooding Europe, that's what they're trying to avoid. Combination of China way overbuilt EV capacity and needs to dump them on some market as well as how uncompetitive the US automakers (possible exception, Tesla) are. Sucks for the US consumers as usual. As with tires the big winner will be the Koreans.
I am not surprised, as there were already rumblings from several members of Congress and auto executives about their support for increasing these tariffs, which are already significant.
I do think they should be careful of unintended consequences though. At a minimum, this means US consumers won't have access to lower cost, competing products. If the United States becomes the only country in the world where Chinese cars can't be sold, this market distortion may also perpetuate a competitive gap. In the days of the Soviet Union, many Soviet products which couldn't compete with Western products survived in their isolated economy for many decades. It kept those companies alive, but they actually only fell further and further behind, because there was no need for them to compete with their insular economy.
I am not surprised, as there were already rumblings from several members of Congress and auto executives about their support for increasing these tariffs, which are already significant.
I do think they should be careful of unintended consequences though. At a minimum, this means US consumers won't have access to lower cost, competing products. If the United States becomes the only country in the world where Chinese cars can't be sold, this market distortion may also perpetuate a competitive gap. In the days of the Soviet Union, many Soviet products which couldn't compete with Western products survived in their isolated economy for many decades. It kept those companies alive, but they actually only fell further and further behind, because there was no need for them to compete with their insular economy.
Yea, I think it's become obvious that Chinese automakers are expanding in Southeast Asia, Oceania, Central Asia, and Latin America, and this isn't going to stop that. Those combined are a much larger future market than the US is and will allow them to scale in a way that the US cannot, so the consequences for China overall are pretty blunted. Supposedly this will give US automakers some breathing room to catch up in the technology, but there's a mixed bag here where there's a strong possibility that US automakers retrench themselves into what they know best even as that goes obsolete.
Last edited by OyCrumbler; 05-10-2024 at 12:15 PM..
Good. Although, couldn't these Chinese companies just build plants in MX and take advantage of NAFTA, or whatever it's called now to import those cars here tariff free ?
Good. Although, couldn't these Chinese companies just build plants in MX and take advantage of NAFTA, or whatever it's called now to import those cars here tariff free ?
They could, but it'd cost them quite a bit to do so. Since it's not the vehicles themselves, but also components used in the vehicles, they'd have to spend time and money to set up these operations in the first place. Meanwhile, Mexico's nominal GDP per capita, which is what would matter more for deciding where to set up export-oriented products, is higher than China's and substantially higher on average than where most of China's automotive parts manufacturing is. I think if they do so, it's not going to be for the draw of the US market itself, but rather to serve Mexico's domestic market as well as Latin American markets first, and if that expands to be large enough, then do some production for the US market. The main draw is probably going to continue to be middle income markets that are already used to an almost wholly foreign automakers operating. Japanese automakers are seeing a particularly rapid changing situation in Southeast Asia, but Latin America is also seeing changes.
I've been thinking lately that if Tesla hadn't given the other US (and European) automakers a slight jostling early on, then the US automotive industry would have been set up for an incredibly rough ride. It might still be a rough ride, but I think not quite as bad if it weren't for Tesla pushing these automakers to go through the growing pains earlier than they would have.
They could, but it'd cost them quite a bit to do so. Since it's not the vehicles themselves, but also components used in the vehicles, they'd have to spend time and money to set up these operations in the first place. Meanwhile, Mexico's nominal GDP per capita, which is what would matter more for deciding where to set up export-oriented products, is higher than China's and substantially higher on average than where most of China's automotive parts manufacturing is. I think if they do so, it's not going to be for the draw of the US market itself, but rather to serve Mexico's domestic market as well as Latin American markets first, and if that expands to be large enough, then do some production for the US market. The main draw is probably going to continue to be middle income markets that are already used to an almost wholly foreign automakers operating. Japanese automakers are seeing a particularly rapid changing situation in Southeast Asia, but Latin America is also seeing changes.
I've been thinking lately that if Tesla hadn't given the other US (and European) automakers a slight jostling early on, then the US automotive industry would have been set up for an incredibly rough ride. It might still be a rough ride, but I think not quite as bad if it weren't for Tesla pushing these automakers to go through the growing pains earlier than they would have.
I have also heard rumblings from members of Congress, that if China looks to import cars to the US through Mexico - which I believe would be legal today, then the US would essentially pass new regulations to make that illegal - in essence carving out an exception in the allowances of what's ordinarily permitted to make it illegal for China to do that. For a country whose politicians are normally shouting about free trade on the world stage, I think doing this kind of thing would be problematic, but I don't put it past our politicians - clearly the general mood is very anti-China in Congress these days.
Last edited by OutdoorLover; 05-10-2024 at 02:58 PM..
The United States wants to slow down Chinese economic growth in the worst way, so it will probably use the national security risk excuse to ban them completely: https://www.asiafinancial.com/us-war...ctric-vehicles
Xi Jinping could probably throw a switch and take control of all of the electric vehicles.
I have also heard rumblings from members of Congress, that if China looks to import cars to the US through Mexico - which I believe would be legal today, then the US would essentially pass new regulations to make that illegal - in essence carving out an exception in the allowances of what's ordinarily permitted to make it illegal for China to do that. For a company that is normally shouting about free trade on the world stage, I think doing this kind of thing would be problematic, but I don't put it past our politicians - clearly the general mood is very anti-China in Congress these days.
Is it anti china or pro american worker ?
I feel we do need to protect our industries here, although, none of the automakers here are currently offering an EV in that low cost segment, so...is it really going to hurt them ?
Not trying to derail the topic here but if you take a geopolitical look at this, it makes a whole lot of sense.
Blackrock has direct input on policies like this. Blackrock invested several billion in a few particular Chinese EV brands. Those same brands took that money and announced mega factories in Mexico.
To protect Blackrocks investment the Biden administration is kindly implementing some policies.
EV mandates to push the fading EV sales.
Tariffs will hinder any non-Blackrock approved Chinese companies that aren't conveniently positioned in Mexico to take advantage of NAFTA.
So, you can safely assume that you will get your cheap Chinese EVs so long as it remains in Blackrock's financial interest.
Follow the money.
I don't understand why anyone would trust their livelihood to one of these cars, but this is the land of the free. I don't buy any food products or products that my life depends on that are sourced from China.
A Japanese, Korean, or Western brand sourcing parts from China that are made to a spec is a completely different animal. Avoiding that would be impossible and pointless.
There is a reason these cars are so cheap, and it's not solely because of heavy subsidies from the Chinese government.
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